Kloppers pay announced

IN-COMING BHP Billition chief Marius Kloppers will be paid a base salary of $US1.85 million per year, but his actual income will no doubt be much higher under the company's incentive schemes.
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BHP Billiton's Marius Kloppers

Kate Haycock

BHP today announced the terms of Kloppers' appointment, which will take effect from October 1 when the South African executive replaces out-going BHP chief executive Chip Goodyear.

Goodyear, who was paid $US7.8 million ($A8.94 million) last year in base salary and incentives, assumed the leadership role in BHP in 2003 and has helmed the company through an unprecedented resource boom and massively increased profits.

The company announced a record 28.4% increase in its net profit to $US13.4 billion ($A16.8 billion) for the 2006-2007 financial year.

Kloppers will also be given the opportunity to earn cash bonuses under BHP's group incentive scheme and additional shares under the company's long-term incentive scheme.

"For performance at the target level, which requires Mr Kloppers to meet the rigorous performance hurdles set by the Board, including delivery of the budget, Mr Kloppers would receive 70% of his base salary as a cash bonus," BHP said today.

Under the long-term incentive plan, Kloppers will also be required to meet a "performance hurdle" under which BHP Billiton's total shareholder return over a five-year performance period needs to be greater than the weighted average total shareholder return of a group of BHP's "peer" companies.

If BHP Billiton's total shareholder return does not meet that level, the performance hurdle will not have been met and the long-term incentive award will be forfeited, the company said.

Under the terms of his appointment, Kloppers will also receive an additional annual sum coming to 40% of his base salary as a retirement savings scheme.

Shares in BHP were last trading at $43.62, down 85c this morning.